Sprint Corporation (S)

At Mobile World Congress, Google (NASDAQ:GOOG) confirms its plans to offer wireless phone service "in the coming months" -- a small MVNO, or mobile virtual network operator, where it would offer branded services by piggybacking on a partner's network.

The company says its entry will be modest and designed to showcase technological innovation, similar to what it does with its Nexus branded hardware, made by partners. But in a hotly competitive market, it could take share and have an impact on whichever competitors it doesn't align with (T, VZ, TMUS, S).

Google hasn't named whose network it would ride on, but it has service-reseller deals with Sprint and T-Mobile.

Besides its direct impact on the fortunes of competitors, which might be small, Google's move might spur innovation from them if it moves on a vision of better wireless connectivity.

Sprint (NYSE:S) is bouncing on heavy volume today, up 5% to 4.86, countering a slow decline the stock has been on since reaching 5.25 on Feb. 17.

Shares had lost 4.3% over the past two days as BTIG Research came in with negative outlook on Sprint's cash flow and revenue growth.

The company has joined AT&T and T-Mobile in teasing the arrival of Samsung's Galaxy S6, using the same phone image but with its signature brand yellow glow. The phone's expected to be unveiled in the coming days.

Walter Piecyk at BTIG Research has downgraded Sprint (S-3.3%) shares to Sell, from Neutral, with some blunt language: “We do not see a path by which Sprint can return to revenue growth, let alone EBITDA growth or positive free cash flow.”

And he adds that "we are tired of waiting" for Softbank's (OTCPK:SFTBY) backing to spur a turnaround: He "simply can't ignore the high cash burn rate and recent comments by Sprint’s Chairman Masa Son and latest CEO Marcelo Claure that outlined a clouded network vision and market strategy that we do not believe offers a clear revenue growth opportunity."

Next year's EBITDA might be only $5.25B vs. estimates of $7.167B.

There's a Catch-22: Piecyk sees the stock's value in its spectrum assets, but if Sprint sells those off, what's left isn't a competitive company.

The carrier recently launched a notes offering to get working capital in the face of its cash burn.

T-Mobile (NYSE:TMUS) gained 2.7% today (and another 0.5% in late trading) following its strong Q4 report this morning.

In the company's call today, CEO John Legere stretched like Armstrong to make a technical point that TMUS is actually the third-biggest U.S. carrier: He says most carriers stop counting "dead" MVNO accounts after 60-90 days, while Sprint (NYSE:S) waits six months. So Legere says Sprint is overcounting by 1.7M customers and is actually behind T-Mobile.

CFO Braxton Carter tells the Financial Times that the company's guidance (on the low side of expectations) is "conservative" and expectations are high: "We are still taking major flow from the duopoly (T, VZ) ... We are very pleased with our first-quarter momentum."

T-Mobile should take a Q1 hit in front-loading customer acquisition, but it expects free cash flow to turn positive at some point this year.

Aside from record customer growth (fueled in part by aggressive promotion), the company pointed to highly watched synergies with its MetroPCS brand -- projecting to reach full run-rate synergies of at least $1.5B by 2016. Net present value there is expected to be $9B-10B, up from original $6B-7B projection.

That's finally "kicking in," says Craig Moffett: "Synergies from the PCS deal, a key driver of our bull case, are coming in sooner and higher than expected" and that the firm "has at last turned the profitability corner."

The destination for the funds is general purposes -- and working capital is a pressing concern with the company's cash burn.

Analyst Craig Moffett has noted that Sprint earnings pressure will make debt financing harder: "As EBITDA comes down, leverage goes up and the company's ability to fund its cash burn and debt maturities with still more debt dries up."

"I think they will do both," says Oppenheimer's Tim Horan. "The cash needs are high."

Sprint has $3.46B in cash, against total long-term debt of $31.2B, and noted free cash flow narrowed to -$1.83B, compared to prior year's -$2.84B.

Cowen's Colby Synesael says Sprint will run out of cash by the end of March 2017, regardless of cost cutting. And Softbank (OTCPK:SFTBY) will be slow to pour in more money.

Regardless of selling its spectrum, Sprint will have trouble with more financing, Craig Moffett says: "As EBITDA comes down, leverage goes up and the company's ability to fund its cash burn and debt maturities with still more debt dries up."

T-Mobile (NYSE:TMUS) chief John Legere takes to the blog to excoriate the FCC's recent AWS-3 wireless spectrum auction as a "disaster" for consumers (even if a success for the Treasury), and to call for revised rules in the future.

Legere complains about AT&T (NYSE:T) and Verizon (NYSE:VZ), who'll use deep pockets to "corner the market on available spectrum at nearly any cost."

He notes: "To add insult to injury, the FCC’s rules actually allowed companies that don’t provide wireless service at all to buy up huge amounts of spectrum and sit on it for ten years!" ... a sure shot at Dish Network (NASDAQ:DISH), who's also taken criticism for using affiliated investment entities to garner a 25% discount on their spectrum stockpiles.

Legere says he's calling for action to avoid "epic failure" in next year's auction of low-band spectrum -- which will be highly contested and even more crucial to wireless companies' ability to reach further into buildings.

He wants at least half the available low-band reserved for competitors who aren't the "Twin Bells" (the FCC will restrict AT&T and Verizon, though not as much as Legere would like) and wants to ensure spectrum is put to use and not "collected and traded like financial securities."

Sprint (NYSE:S) mainly sat out the last auction but is sitting on spectrum that others may covet.

With its network now no longer the worst, Sprint (NYSE:S) is ready to start tomorrow's rollout of LTE and Spark networks in 48 new markets, including Hawaii, Colorado, and Washington D.C.

The move means that Sprint will cover more than 270M people with LTE (125M with 2.5-GHz spectrum, part of the three-band "Spark" spectrum).

The high-speed data is important to Sprint's story of continuing improvement, not to mention the pressure for voice over LTE (years in the future, but still out there in the distance for all carriers).

Giving an update on its $10.4B in FCC spectrum bids, Verizon (NYSE:VZ) says it's got no pressing need to make big spectrum buys in the near term -- and will focus on getting more leverage out of current spectrum, considering it's a sellers' (government) market.

Verizon didn't rule out leasing spectrum from peers and is watching Sprint's (NYSE:S) 2.5-GHz airwaves, as well as unlicensed spectrum.

The $45B in bids at the AWS-3 auction highlighted the rising costs of new airwaves, with new competitors bidding over a hotly contested space.

"Our competitors are going to continue to invest [in networks] so they are representing a situation that won't play out," says Sprint CTO Stephen Bye.

Network investment is a key issue for Sprint -- it has a lot of work ahead to unify its LTE bands, and it still lags AT&T/Verizon in network quality (though it's moving up).

Meanwhile, dealing with RadioShack (NYSE:RSH) on some 1,750 co-branded stores gives a shot in the arm to Sprint distribution, which was strained by long lines during their recent "Cut Your Bill In Half" and "IPhone For Life" promotions.

While Verizon (VZ+0.4%) and AT&T (T+0.6%) are still the big two competing over mobile network size/reliability, Sprint (S+1.2%) and T-Mobile (TMUS+1%) are competitive in metro areas, according to analysis firm RootMetrics.

The company tested every mobile network by driving the equivalent of 100 U.S. coast-co-coast trips in the last half of 2014.

Verizon won out overall and on network speed and data; AT&T came in second and won on text performance.

Biggest problems for the sector's "other two": Reliability for T-Mobile; speed for Sprint.

For their part: "It’s a very encouraging result for us," says Sprint network chief John Saw; "We believe the metro stuff is the most important," says T-Mobile CTO Neville Ray.

"The good news is that our testing shows every network is getting better," says RootMetrics' Bill Moore.